A0858
Title: Constructing high-frequency measures of income and consumption inequality
Authors: Laura Jackson Young - Bentley University (United States) [presenting]
Michael Owyang - Federal Reserve Bank of St Louis (United States)
Ashley Stewart - Federal Reserve Bank of St Louis (United States)
Hoang Le - Lafayette College (United States)
Abstract: Measures of income and consumption inequality are many and varied. While data from the Current Population Survey are of higher quality (at least at the lower and middle of the income distribution), they are annual, making them ill-suited for empirical analysis, such as in VARs. The Survey of Consumer Expenditure data are higher frequency but considered lower quality. Recently, a high-frequency income inequality dataset using CPS and IRS data, temporally disaggregated on labor income, has been produced. As an alternative, we produce income and consumption inequality based on CPS data, temporally disaggregated on CEX data using a Bayesian version of Chow-Lin. We compare our series to BSZ in a monetary policy application, where we examine the effects of monetary contractions on income inequality.
